According to Engadget, “Steve Jobs is planning to drop by Motorola’s upcoming media and analyst event on July 25th where he’ll help Moto CEO Ed Zander kick off the ROKR E1, the very first iTunes phone.”

Besides this just being a rumor, it's not clear whether this phone will be **the** iTunes phone, or one of the phones able to sync with iTunes. Additionally, the reported cost of the phone is less than $200, making it likely that it's a version of the E398, and probably not a more advanced phone, as shown in this post. According to Engadget, the phone has limited memory--only 25 songs, which can be upgraded to 100 songs.

Read the post here.